Q4 FY2026: Completed two equity-for-equity exchanges in which the Company's remaining 1.7 million Sandisk shares were exchanged for 4.8 million WD common shares, eliminating all Sandisk holdings and reducing outstanding share count; the exchange generated $254M in transaction costs.
Q4 FY2026 (June): Settled $858M of 3.00% 2028 Convertible Notes via privately negotiated exchange for $860M cash and 21.3M common shares, and separately settled $32M of Tendered Notes for $360M cash (electing cash over shares for the conversion premium); total convertible notes outstanding declined from $1.6B at year-start to $710M, with $343M additionally tendered for conversion expected to settle in Q1 FY2027.
Q4 FY2026: The Company obtained investment-grade ratings from two rating agencies, triggering the full release of the guarantee and collateral lien securing its $1.25B Revolving Credit Facility (matures January 2027; $350M drawn, $900M available).
Annual context (FY2026, 53 weeks): Net revenue rose 36% to $12.9B on 25% exabyte growth and 8% ASP-per-exabyte increases; Cloud (89% of revenue) grew 38% to $11.5B; gross margin expanded 10.1 pp to 48.9%; operating income was $4.5B. The Company recorded $146M in business realignment charges, including cancellation of certain facility projects and impairment of construction-in-progress as it realigned capacity to support recent demand growth.
Outlook: Management expects FY2027 capital expenditures to exceed the $418M invested in FY2026, citing necessary investments in recording-head and media operations and manufacturing automation; it also notes customers are extending the duration of commercial arrangements and engaging earlier on future capacity, improving long-term demand visibility.
(Filed on May 1, 2026)
+45.5%
50.2%
$2.1B
Q3 FY2026 net revenue rose 45% year-over-year to $3,337M, driven by a 34% increase in exabytes sold and a 9% increase in ASP per exabyte; Cloud (89% of revenue) grew 48% to $2,972M. Management attributed growth to strong demand for high-capacity enterprise HDDs fueled by AI adoption and hybrid data workloads, noting customers are partnering earlier and extending the duration of commercial arrangements. Gross margin expanded 10 percentage points to 50.2% on a lower cost structure for newer-generation products and improved pricing. R&D rose 20% to $294M, including $25M of incremental product development spend.
In February 2026, the company completed a debt-for-equity exchange: it entered a $1.50B bridge loan to fully redeem all Senior Notes (4.75% due 2026, 2.85% due 2029, 3.10% due 2032), then retired the bridge loan and Term Loan A-3 in a tax-free exchange for 5.8 million Sandisk shares valued at $3.62B. The exchange generated $539M of costs primarily reflecting a share-price discount. Total outstanding debt fell from $4,749M at June 27, 2025 to $1,600M (solely the 3.00% 2028 Convertible Notes). As of April 3, 2026, the company held 1.7M remaining Sandisk shares, which it expects to monetize by end of calendar 2026 in one or more further exchanges.
On February 17, 2026, all remaining Series A Convertible Perpetual Preferred Shares (aggregate liquidation preference of $267M, including $32M paid-in-kind dividends) were mandatorily converted into 7 million shares of common stock; the Preferred Shares were subsequently eliminated on February 24, 2026, removing the preferred equity line from the balance sheet.
The company recorded $45M in business realignment charges in Q3 (predominantly $40M in cash-based and $5M in stock-based employee termination benefits), bringing the nine-month total to $103M. Management described these as organization rationalization actions to streamline operations and reduce cost structure, with approximately $5M of additional termination costs expected in the remainder of fiscal 2026.
During the quarter the company obtained investment-grade ratings from two rating agencies, triggering the release of guarantees and collateral on its $1.25B 2027 Revolving Credit Facility under the Loan Agreement. The company also noted that U.S. tariff and trade-policy changes have not materially impacted its business through Q3 FY2026, though it is actively monitoring and assessing mitigation options for potential future actions.
(Filed on January 30, 2026)
+25.2%
45.7%
$2B
Q2 net revenue of $3,017M rose 25% year over year, driven by a 22% increase in exabytes sold and a 2% increase in average selling price per exabyte, which management attributed to strong demand for high-capacity enterprise HDDs and AI/hybrid-data workloads. Cloud revenue grew 28% to $2,673M (24% exabyte growth, 3% ASP increase); Client grew 26% to $176M; Consumer declined 3% to $168M.
Gross margin expanded 8 percentage points to 45.7% (from 37.7% in the prior-year quarter), which management attributed to a lower cost structure on newer-generation HDD products and improved pricing on higher-capacity drives.
The company recorded a $1.10B unrealized mark-to-market gain on its retained Sandisk stock in Q2; the retained stake was valued at $2,068M as of January 2, 2026, up from $354M at fiscal year start. In June 2025, 21.3M Sandisk shares were exchanged in a tax-free transaction to retire $800M of Term Loan A-3. The company stated it expects to monetize its remaining Sandisk stake to further reduce debt within one year of the February 2025 separation date.
The company recorded $55M in business realignment charges in Q2, consisting primarily of $52M in cash-based employee termination benefits. In January 2026, it implemented additional streamlining actions and expects to record approximately $50M in incremental employee termination costs during the remainder of fiscal 2026.
Top-10 customer concentration rose to 76% of Q2 revenue from 67% in the prior-year quarter, with three customers individually accounting for 15%, 14%, and 14% of revenue, reflecting the concentration of hyperscale cloud demand in high-capacity enterprise drives.
The sale-price conditional conversion feature of the $1.60B 3.00% 2028 Convertible Notes was triggered during the calendar quarter ended December 31, 2025, entitling holders to convert during the quarter ending March 31, 2026; the notes were accordingly reclassified to current liabilities. Capped call transactions with an expected adjusted cap of approximately $50.43 per share remain outstanding to offset potential dilution.
(Filed on October 31, 2025)
+27.4%
43.5%
$2B
Q1 FY2026 net revenue of $2.82 billion rose 27% year over year, driven by a 3% unit increase and a 19% average selling price increase from a shift to higher-capacity drives; Cloud revenue grew 31% on 5% higher unit shipments of high-capacity enterprise products and roughly 6 percentage points from data storage systems revenue. Management attributed accelerating demand to AI and data-driven workloads, noting customers are partnering earlier and extending the duration of commercial arrangements while longer production lead times reflect greater manufacturing complexity.
Following the February 2025 Separation, WDC now operates as a pure-play HDD company (one reportable segment). It recorded a $611 million mark-to-market gain on its retained Sandisk stake (fair value $965 million at quarter-end, up from $354 million at fiscal year-end). WDC had previously exchanged 21.3 million Sandisk shares in a tax-free deal to retire $800 million of Term Loan A-3; it expects to monetize the remaining stake within one year of the Separation date (by February 2026).
Customer concentration increased materially: the top 10 customers accounted for 77% of Q1 revenue (vs. 65% a year earlier), with three customers at 18%, 16%, and 14% individually. Asia revenue nearly doubled to $1.18 billion (from $686 million), and Europe/Middle East/Africa rose to $543 million (from $279 million), reflecting customer data-center capacity expansions in those regions.
On capital allocation, WDC repurchased 6.4 million shares for $553 million under its May 2025 $2.0 billion program ($1.30 billion remaining) and paid a $0.10-per-share common dividend totaling $34 million. Subsequent to quarter-end, the Board declared a $0.125-per-share dividend payable December 18, 2025. The company guided FY2026 capital expenditures at approximately 4% to 6% of net revenue.
The sale-price conditional conversion feature of the $1.6 billion 3.00% Convertible Notes due 2028 was triggered during the calendar quarter ended September 30, 2025, giving holders the right to convert through December 31, 2025; WDC reclassified the notes to current portion of long-term debt. Separately, the court reduced the SPEX patent-infringement damages award to $1 (nominal) in June 2025; both parties have appealed, and WDC has not accrued a liability, stating a loss is not probable based on available appellate arguments.
